Airlines commit fraud on a continual basis, each day every day. Chances are if you have booked a ticket on an airline you have been a victim of fraud and you don’t even know it. Here’s how they do it and why they get away with it.

AirTran Airlines today was assessed a $100,000 civil penalty of which $50,000 has been deferred because of deceptive advertising. From September to December last year AirTran ran an advertising campaign touting its new credit card that would give out two free round-trip tickets if the minimum spend was reached. While AirTran did not charge any fees on those tickets, they failed to mention that the consumer would have to pay the 9/11 security fee which is $2.50 per flight number up to $10.00 per ticket on the advertising.

While the order didn’t mention how the DOT became aware of this, I can only assume some of people who got the card, met the several thousand dollar minimum spend, and redeemed free tickets filled DOT complaints about the 9/11 fee. While it is a nominal fee, airlines are compelled to disclose the fee in their advertising which AirTran here failed to do. For that they get to visit pay.gov and hand over 50K. The other 50k fine will be waived if AirTran doesn’t commit any more advertising violations in the next year.

Today the DOT released its decision on what to do with the DCA slot pair that Spirit Airlines returned to the DOT when it shifted service from DCA to Baltimore/Washington Airport. There were three bids for the slot pair and today the DOT awarded Southwest the slot to start HOU-DCA.

On May first, Southwest airlines agreed to a $150,000 civil penalty assessed by the DOT for violations of Federal Air Regulations. The Regulation violated mandates that a carrier providing secluded air service with aircraft with more than 19 seats respond to consumer complaints within a 30 to 45 days depending on the nature of the complaint.

Apparently in 2012 Southwest pushed out an update to their website that resulted in Southwest not receiving complaints that had been filed on the website. Out of the $150,000, Southwest has to provider refunds in the amount of $115,000 and pay the government $35,000. In case you’re wondering Southwest has to use pay.gov to tender the $35,000.

Being the not so good blogger I am, I went back to the docket today to have a look at the what the DOT is saying about awarding the available Brazil-US slots. Currently, the slots have not been awarded. According to a published timetable the DOT plans on having a final decision issued no earlier than the middle of next month. The only thing of interest so far was that Delta wanted US Airways and United to disclose the lease agreement that allows US Airways to use United’s slots for their Charlotte-Brazil flight. The DOT denied that motion.

Sorry for being away for the past couple of days, I’ve been kind of sick. But anyways on the with the show.

Previously, I reported on American applying to start LA-Sao Paulo this year and Chicago-Sao Paulo next year. Now airlines had 15 days to file bids. After those 15 days had expired, US Airways and Delta both filed bids. You can read all of the information in the bids in the regulations.gov link at the bottom of the page. Now lets start with U.S. Airways bid.

U.S. Airways is asking for 7 frequencies starting this October for Charlotte-Sao Paulo and 7 starting in 2014 for Philadelphia-Sao Paulo. Currently, U.S. Airways is leasing the frequencies to run Charlotte-Sao Paulo from United, so getting these frequencies would obviate the need for the lease.

Delta is asking for 14 frequencies to run Atlanta/JFK- Sao Paulo to start this year and 7 frequencies to start Detroit Sao-Paulo next year.

So there are 14 frequencies to be allocated this year. Delta wants all 14, American wants 7, and US wants 7. There are also 14 slots next year Which Delta wants 7, AA wants 7, and US wants 7. More applicants than frequencies so some will win and some will lose. Let’s start with this year.

Back on February 20th I wrote a post about how the DOT was putting additional US-Brazil route authorities up for bid. The deadline to submit a bid is today and so far only one airline has applied for the slots. American Airlines submitted an application yesterday to start Los Angeles-Sao Paulo on Nov 21 of this year and Chicago-Sao Paulo on November 20, 2014. They plan to start service using 777-200s. For the United customers in LAX this will mark a welcome change from having to first get to IAD, IAH, or EWR, and will bring some competition with United on the ORD-GRU route.

In 2008 the DOT awarded two slots to Spirit Airlines for daily non-stop service between Washington National Airport and Fort Lauderdale Airport. In July 2012 Spirit served notice to the DOT that they were abandoning their slots when the moved from DCA to BWI. The DOT made an announcement in the Regulations.gov docket DOT-OST-2000-7182 that the two “inside perimeter” slots are again up for bid. The DCA perimeter is a 1,250 miles. So an inside perimeter flight must be within 1,250 miles of DCA. Three airlines filed bids

US Airways filed a bid to start Oklahoma City – Washington DC

Southwest filed a bid to start Houston Hobby – Washington DC

and JetBlue filed a bid to Start Washington DC – Jacksonville FL continuing on to San Juan PR.

Previously several years ago US Airways and Delta did a slot swap between New York LA Guardia Airport and Washington National. This allowed Delta to develop a large operation at LGA and allow US Airways to increase the size of their DCA operation. Now I haven’t been in DCA since 2007 so I am not too familiar with the airport. So I wasn’t too sure of the size of US Airways operation there. However, because your truly is nerd I was reading Regulations.gov and I came across this:

The DOT under its agreement with their Brazilian counterpart has opened up new frequencies for bidding. Starting on 2/15 and going for 15 days carriers can submit bids to the DOT for routes starting on October 1, 2013

14 frequencies to anywhere in Brazil

14 frequencies to anywhere in Brazil excluding San Paulo

and

14 frequencies to anywhere in Brazil excluding San Paulo and Rio de Janeiro

For routes starting on October 1, 2014

14 frequencies to anywhere in Brazil excluding San Paulo

and

21 frequencies to anywhere in Brazil excluding San Paulo and Rio de Janeiro

According to the DOT Docket no applications have been filed. I imagine that will change at least for the 14 frequencies that equal two daily flights to anywhere in Brazil. Currently most US airlines operate red-eyes in both directions. This allocation would allow them to run day flights on that route and increase aircraft utilization as the planes currently sit on the ground all day in Brazil. Delta may take some of the more restrictive slots as they tend to start any route they can think of (and drop it less than a year later, but that’s another post).